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India:TUFS subsidies likely to go up 8% |
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2004-11-25
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In yet another attempt to support the local textile industry, the Government under the Technology Upgradation Fund Scheme (TUFS) plans to raise subsidies up 8 percent from the present 5 percent.
Incidently, first six months of the current financial year saw disbursements under TUFS reach Rs 956 crore as against Rs 856 crore in 2003-04.
Giving details, the Textiles Minister Shankersinh Vaghela said, "The offtake from the Rs 25,000 crore TUFS has been just Rs 6,000 crore in the last five years. We want to increase the off take. I have discussed the issue of increasing subsidy with my colleagues and the cabinet will take a decision on it soon."
He reiterated the fact that in view of the immense opportunities coming up as the textile quotas expiry in January net year, Indian industry will have to attract investment to the tune of Rs 60,000 crore.
The government, he informed has already lowered the threshold for taking assistance for spinning units from 25,000 to 12,000 spindles, and for other units the minimum size for subsidy has been reduced from 12,000 to 8,000 spindles. This has resulted in higher disbursement under the scheme.
All such steps would lead to growing Indian exports at a high pace after the quotas are dismantled from January.
Asked of the government’s move in anticipation of falling prices of cotton in face of a glut, he said, "Till now the price of cotton have been steady in the domestic market but if they fall we will give incentive for export," Vaghela said.
As regards jute mills revival plans where restarting two mills has gone for cabinet approval, he said, "If joint venture route for revival of jute mills is successful the formula may be tried for revival of mills under national textiles corporation (NTC). The group of ministers is not in favour of government running NTC, therefore for the revival of some of the viable mills joint venture route could be explored," Vaghela said.
Favoring Jute Packaging Order making it compulsory to store all foodgrains and sugar in jute bags, he stated that existing order makes it mandatory to pack all foodgrains and 90 per cent of sugar in jute bags.
"Leaving 10 per cent of sugar for other forms of packaging makes no sense. It must be mandatory to pack all foodgrains and sugar in jute bags. While plastic packaging industry has other markets, for jute it is the only means of survival," he commented. |
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